In brief
- Consumer prices rose 3% in the 12 months through September.
- Friday’s CPI report was delayed by an ongoing government shutdown.
- The Federal Reserve is expected to cut interest rates next week.
Bitcoin and other cryptocurrencies rose on Friday after a widely watched inflation gauge showed consumer prices rose at a slightly slower-than-expected pace in the U.S. last month.
The Consumer Price Index rose 3% in the 12 months through September, the Bureau of Labor Statistics said. Economists expected the index, which tracks price changes across various goods and services, to show 3.1% annual increase, according to Trading Economics.
Bitcoin changed hands around $111,300, a 2% gain over the past day, according to CoinGecko. The leading cryptocurrency by market capitalization had recovered to $113,000 on Tuesday, following its tariff-fueled drop from $121,000 two weeks ago.
Ethereum and Solana rose to $3,960 and $193, respectively, while showing 2.5% and 2.1% gains over the past 24 hours. The assets have lagged Bitcoin as renewed tensions over tariffs and trade between the U.S. and China recently drove gold prices to record highs.
On Myriad, a prediction market owned by Decrypt parent company Dastan, traders favored “Greed” over “Fear” at 58% and 42%, respectively. On Wednesday, “Fear” had spiked to 57% before U.S. President Donald Trump reaffirmed positive expectations on a deal with China.
September’s CPI report marked the third straight month in which inflation grew hotter after cooling to 2.3% in April. Meanwhile, core inflation, which strips out volatile food and energy prices, softened to 3% annually in September from 3.1% a month before.
Friday’s snapshot comes as the U.S. government shutdown enters its 24th day. Although the shutdown delayed today’s CPI report by a week, the Federal Reserve will still have several days to digest the reading before officials convene for the central bank’s next policy meeting. (On Myriad, traders foresaw a 77% chance that the shutdown would stretch beyond Nov. 5.)
The Fed is widely expected to cut interest rates by a quarter of a percentage point at the conclusion of its penultimate rate-setting meeting in 2025. Traders’ expectations of a similarly sized cut in December softened to 88% from 91% a day before, according to CME FedWatch.
Fed officials have been cautious to lower borrowing costs this year, fearing that shifts in trade and immigration under President Donald Trump could make its 2% inflation goal more difficult to achieve. Recently, however, the Fed has grown more focused on the labor market’s health.
Earlier this month, Fed Chair Jerome Powell said there is “no risk-free path for policy” as the Fed navigates tension between its employment and inflation goals, noting that the central bank is being guided by a “meeting-by-meeting approach.”
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Source: https://decrypt.co/345837/bitcoin-ethereum-rise-september-inflation
